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VMware acquires mobile security firm AirWatch for $1.54 billion

VMware, a cloud and virtualization software maker based in Palo Alto, Calif., has acquired mobile security firm AirWatch for $1.54 billion.

Under the terms of the deal, VMware will purchase AirWatch, an Atlanta-based provider of enterprise mobile management and security solutions, for approximately $1.175 billion in cash and around $365 million in installment payments and assumed unvested equity.

According to a Wednesday press release from WMware, AirWatch co-founder and chairman Alan Dabbiere will oversee a new AirWatch operating board that will report to VMware's CEO Pat Gelsinger.

“With this acquisition VMware will add a foundational element to our end-user computing portfolio that will enable our customers to turbo-charge their mobile workforce without compromising security,” Gelsinger said in the release.

The deal is expected to close before the end of this quarter.  

On Monday, AirWatch's CEO John Marshall told that the company will retain its headquarters and branding after it becomes a division of VMware.

As a result of the deal, VMware, which pulled in more than $1 billion in revenue in the fourth quarter of 2013, will expand its end-user computing group. In addition, AirWatch will introduce an expanded portfolio of mobile products that will compliment WMware's offerings.

“Most importantly, I think this is great for our customers and partners to be a part of this platform,” Marshall said of the acquisition. “It's a great combination. Of course there's a lot of work to do, but we feel it will have a huge benefit for our customers.”

Late last month, the security industry took note of another major acquisition, when network security firm FireEye acquired Mandiant for just over $1 billion in cash and stock.

Mandiant, an Alexandria, Va.-based incident response and forensic firm, shot to notoriety, both in and outside of security circles, after it published an in-depth report last February on the inner workings of a China-based cyber espionage group, dubbed “APT1,” that targeted U.S. companies.

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